TORONTO - Marchese Hospital Solutions should have accounted for the extra saline in bags of diluted chemotherapy drugs that were administered to just over 1,200 cancer patients in two provinces, an Ontario legislative committee heard Monday.

The company's contract specified an "exact concentration" of the drugs, but the labels didn't accurately describe their contents, said Medbuy, a group purchasing organization that arranged the contract between Marchese and four Ontario hospitals.

"In layman's terms, the label that's on the affected products is not an exact representation of concentration and our hospitals were relying on it being an exact expression of concentration," Medbuy president and CEO Kent Nicholson said after his appearance before the committee.

"There was overfill in the bag."

The extra saline in the bags containing cyclophosphamide and gemcitabine supplied to the hospitals in Ontario and one in New Brunswick effectively watered down the prescribed drug concentrations by up to 20 per cent.

Some of the cancer patients were receiving the diluted drugs for as long as a year.

Marchese has said it prepared the drugs the way it was asked to under its contract with Medbuy and under the supervision of a licensed pharmacist.

But Nicholson said the contract wasn't difficult to understand — it was clear that they were supposed to provide an exact concentration.

"In our mind the specification was clear, the response was clear," he said.

"We were reliant on the manufacturer understanding the specification, producing the product to that specification, labelling their product to that specification."

Nicholson said the affected hospitals didn't "misadminister" the drugs, as Marchese has suggested.

The pharmacist at Marchese who oversaw production of the mixture should have accounted for the extra saline in the bags, Michael Blanchard, Medbuy's vice-president of pharmacy, told the committee.

"They labelled as an accurate specific concentration in that bag, and if it wasn't, they should have adjusted the label accordingly," he said.

Previous witnesses have testified that the drug mixture Marchese was producing was completely different from the one the hospitals thought they were buying.

Marchese didn't account for the so-called "overfill" of saline, thinking they were being administered to a single patient, the committee heard. The labels also didn't indicate the amount of overfill.

But the hospitals were actually extracting fluid from the bag to prepare chemotherapy treatments for different patients, unaware that the drug mixture had too much saline.

A pharmacy assistant at a Peterborough, Ont., hospital that had just started using the Marchese products discovered the problem when they noticed that the label only listed the amount of the drug gemcitabine in the bag, not the final concentration of the drug per millilitre of saline.

The labels on products from Baxter, their previous supplier, listed both.

Nicholson said he doesn't understand why Marchese would think that the bags of gemcitabine would be given to a single patient, since the dose — four grams — would have been harmful.

He said he no longer thinks Marchese is qualified to provide the service, but wouldn't call it sloppy work.

"This particular issue could have been avoided had the label correctly indicated what was the contents of the bags. Their ability to ad mix is not in question," he said after the hearing.

"If the label had accurately described what was in the bag, we would not have had an issue here."

Ontario and Health Canada have acknowledged that there was no oversight of Marchese Hospital Solutions and don't know how many other companies like Marchese are operating in Canada.

Blanchard said Medbuy was satisfied that Marchese met the criteria to provide the service because a licensed pharmacist would oversee the mixing.

But Medbuy was aware that it was "grey zone in terms of who was going to provide oversight," he said.

In the wake of the drug scare, Health Canada has ordered that compounding and admixing can continue if it is done within a hospital meeting provincial requirements, outside a hospital under the supervision of a provincially licensed pharmacist, or in a manner that meets the licensing and manufacturing requirements of the Food and Drugs Act.

The Ontario government has posted a new regulation to ensure that hospitals purchase drugs only from accredited, licensed or otherwise approved suppliers.

The province also wants to give the Ontario College of Pharmacists the power to inspect facilities where pharmacists and pharmacy technicians practice, including where drugs are prepared.